In trying to maintain personal budgets and business expense accounts, an individual experiences the problem of gathering data and inputting that data into a computer spreadsheet program or some other type of computer program. Once the data has been sorted by categories and entered into a spreadsheet program, an individual can quickly manipulate this data to obtain accurate financial pictures. Not only do the spreadsheets allow an individual to tabulate data but also allow the printing out of graphs that visually indicate where money is being spent.
People spend their money in one of three types of transactions: cash, check, and credit cards. In the case of both credit cards and checks, an individual has a paper record of the amount of the expenditure, date of expenditure, and with whom (payee) the expenditure was made. In addition, an individual can in their checkbook indicate the category of expense that the check was written for. In the case of a credit card, an individual can note on the credit card receipt the category for which the money was spent. When cash is utilized to pay an expense, an individual can write on the receipt received for the payment the category. Many individuals also have to classify expenditures as either personal or business. The key problem however is to enter this information into a spreadsheet program. Not only is the data entry time consuming and boring, it is also prone to mistakes. Because of this key problem, most people cannot accurately track their expenses with respect to specific categories.
Another problem that arises with the use of credit cards is the need to verify that the amounts detailed on the monthly statement have been correctly reported by the merchants or service providers. To ascertain, if these amounts are correct, the individual must match up each amount listed on the statement with the receipt obtained when the credit card was used. This is a particularly frustrating process because daily use of credit cards results in a large number of receipts. Further, receipts are often lost or misplaced since they are individual pieces of paper.
With respect to the use of checks, the monthly statement for the checks must be reconciled with the checkbook. Discrepancies between the net amount shown in the checking account by the statement and that shown by the checkbook are often due to incorrect entries in the checkbook or mistakes in arithmetic operations within the checkbook itself. These problems normally take time to find and correct.
A partial solution to these problems is set forth in U.S. Pat. No. 5,233,547 of M. A. Kapp, et al. This patent discloses an electronic checkbook which uses a digitizer to collect information concerning the date, the payee of the check, and the amount of the check as the check is being written. The patent also discloses the fact that reconciliation between the balance shown in the electronic checkbook and that shown on a check statement can be reconciled by using an automatic teller machine (ATM) or by connecting into the computer of a bank via a personal computer. The problem with the disclosed system is that it does not categorize the expenses for which the checks are written nor does it address the problem of the use of credit cards and cash.